Grain Origination: Buying Smart & Building Relationships
Part of my job at a country elevator was buying grain from farmers. I want to be completely clear that the vast majority of my interactions were...
The Common Challenge: Price Pressure
Grain originators frequently face pressure from farmers and competitors. It’s a familiar conversation - “Your bid is 10 cents lower than the co-op down the road. Why can’t you match it?”
Why Price isn’t Everything
While it’s tempting to adjust bids to win business, chasing the highest price isn’t always sustainable. Successful grain elevators differentiate themselves in ways beyond just price, such as:
Educating Your Customers
Grain originators must be proactive in explaining their value proposition. Instead of simply competing on price, they should highlight the benefits of working with them.
Turning Price Conversations into Opportunity
A team of merchandisers and originators at a grain elevator recognized the importance of clear communication when facing price competition. They developed a strategy where originators were equipped with key talking points that emphasized their elevator’s service advantages - such as efficiency, reliability, and personalized support. By proactively addressing farmer concerns, they were able to maintain strong business relationships and uphold margin integrity without always matching the highest bid.
Key Takeaway: Price matters, but long-term relationships and service can outweigh temporary price gaps.
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